Woulda, Shoulda, Coulda

We all know that it’s unproductive to think, “If only I’d bought here or sold there.” Or “If only I picked up Network Appliance before it bounced back instead of selling it into its bottom” – if only, if only, if only. These two words have no place anywhere near an investor's portfolio, Cramer said.

People don’t spend enough time talking about the psychology of investing. The pressure of owning stocks and having to make decisions about whether to buy or sell them is intense. It’s scary. Being an investor is emotionally brutal, but very few people ever talk about that side of stocks. Oh, they’ll talk about earnings and expectations and comparisons – all the rational stuff – but none of that matters if they can’t get their head under control.

Investors can’t afford to be thrown off their game, but at some point they’ll come down with a case of the woulda, coulda, shouldas. So they need to be proactive when that happens. Cramer will take an offending stock off his monitor or portfolio watch – anything to get that stock off his mind so it doesn’t cloud his judgment on his other picks. The worst thing an investor can do is let a mistake undermine his confidence.

Now this doesn’t mean investors shouldn’t evaluate their performance. They have to review what has worked in their portfolio and what hasn’t. But letting screw-ups undermine self-confidence doesn’t make a person better investor.